OverDrive sold to private equity firm KKR

[odamizu]

The Christmas Eve timing of the announcement is curious — as if they wanted this news to fly under the radar.

from BusinessWire:

KKR, a leading global investment firm, today announced the signing of a definitive agreement to acquire OverDrive, Inc. (“OverDrive” or the “Company”), the leading digital reading platform for libraries and schools, from Rakuten USA ...

from MarketWatch:

The two sides did not provide a price tag for the Ohio-based property, which Rakuten purchased for $410 million in 2015 , but Rakuten said it would recognize about $365.6 million in profit from the sale

[binaryhermit]

The timing does seem weird...
And given how private equity firms generally operate firms they acquire... RIP Overdrive?

[rcentros]

Originally Posted by binaryhermit

The timing does seem weird...
And given how private equity firms generally operate firms they acquire... RIP Overdrive?

Well... rats. I guess KKR bought RBDigital last year. I wonder if Rakuten is also marketing Kobo.

[DuckieTigger]

Interesting. I wonder if the OD integration into Kobo ereaders will survive.

[Pajamaman]

Interesting. I think ratakun paid a lot of money for it. Did they stymy Amazon?

[stumped]

so all software solutions to borrow e-books from libraries will be under the thumb of a single private equity firm ( who may merge Overdrive with Rbdigital or kill one to promote the other)

I don't see this ending well, for us consumers

[John F]

Originally Posted by stumped

so all software solutions to borrow e-books from libraries will be under the thumb of a single private equity firm ( who may merge Overdrive with Rbdigital or kill one to promote the other)

I don't see this ending well, for us consumers

Aren't there other alternatives, like FReading?

[stumped]

Originally Posted by John F

Aren't there other alternatives, like FReading?

never heard of them but ok - a google search shows some USA libraries use them, dunno how many.

I thought overdrive had most of the library market, except where Rbdigital had under-bid them on renewals( which is what happened with my library )

wikipedia says
[overdrive's]global network includes more than 43,000 public libraries, K-12 schools, colleges and universities, and corporations in 75 countries worldwide.

I cant easily find comparable figures for the others,
but looking for freading on google play it had only 500+downloads [ and 1 terrible review] , compared to 1M+ for libby & 5M+ for overdrive, so hardly a serious competitor ?
RBditial is 500k+ and borrowbox 100k+

so judging from downloads, overdrive has 10x the users of Rbdigital , & 2,000x the users of Freading

[fjtorres]

One of the ways these firms operate is to buy wholly owned subsidiaries to take them public. Also, it is worth remembering that library ebook lending isn't the only thing Overdrive does, just their dominant revenue stream.
They are also ebook distributors for white label ADEPT ebookstores. A dying business, I know, but their Libby app is all over the place--well over a million installs on Android--so they are a viable candidate to add ebook sales to Libby and add a consumer business.

They have the visibility and back end capabilities to expand into ebook and audiobook retail and challenge Amazon. They could also look to pbooks to challenge Ingram now that Baker and Taylor is out of the trade book distribution business. Or, less likely, they mivht buy Ingram.

Also, if B&N wants to get rid of Nook or their pbook distribution system (as suggested by Shatzkin), KKR could buy it cheap and combine the three properties, run it a year, and IPO it.

They paid a premium for Overdrive so expansion and IPO is the more likely plan.
What remains to be seen is how they go about it.

This could get interesting.

[bookyboy]

Gross. Just gross.

Private equity. Ugh.

It makes me wonder if they are looking to part with all of Kobo at some point also

[teija]

Originally Posted by bookyboy

Gross. Just gross.

Private equity. Ugh.

It makes me wonder if they are looking to part with all of Kobo at some point also

This news about Overdrive is very sad indeed! I only JUST picked up a Kobo Clara HD 3 weeks ago so that I could make use of the handy Overdrive integration...now I fear that may disappear!

I do have to honestly wonder if Kobo is making much money these days... Hard to compete with the "mainstream" Amazon Kindle ecosystem for its ease of use and integration with regular "shopping". (i.e. A user can go onto the Amazon site to buy household supplies and then easily pop over to the Kindle section to buy something to read, or be linked to something via their suggestions).

[ZodWallop]

Originally Posted by DuckieTigger

Interesting. I wonder if the OD integration into Kobo ereaders will survive.

It seems like it would be in OverDrive's interest to be available on as many devices as possible, now that a single ereader manufacturer doesn't own them.

[pwalker8]

Originally Posted by bookyboy

Gross. Just gross.

Private equity. Ugh.

It makes me wonder if they are looking to part with all of Kobo at some point also

Private equity firms have been demonized for political purposes, but really there is nothing wrong with them. They have purchased and maintained a lot of older firms that had fossilized. Sometimes they close a company and sell the assets, sometimes they provided needed capital and leadership to right the company.
If you look at the holdings of KKR, you see they have investments in a lot of companies include Lyft, Sonos and UFC, and many of their investments go back years.

[fjtorres]

Originally Posted by ZodWallop

It seems like it would be in OverDrive's interest to be available on as many devices as possible, now that a single ereader manufacturer doesn't own them.

Their money comes from the libraries not the readers.

So realistically Kobo integration benefits Kobo a lot more than Overdrive. To differentiate their hardware from the other ADEPT ePub ereaders. Kobo might have to pony up some cash now that they're not corporate siblings. Or not.

Also, to the extent that driving library usage benefits Overdrive, they might open up the channel to other ADEPT ereaders, maybe all of them, instead of closing it to Kobo.

Seems to me folks are only thinking about bad options instead of ways freeing Overdrive from (the not so ebook-invested) Rakuten might be good.

[j.p.s]

Originally Posted by ZodWallop

It seems like it would be in OverDrive's interest to be available on as many devices as possible, now that a single ereader manufacturer doesn't own them.

Originally Posted by fjtorres

Also, to the extent that driving library usage benefits Overdrive, they might open up the channel to other ADEPT ereaders, maybe all of them, instead of closing it to Kobo.

Seems to me folks are only thinking about bad options instead of ways freeing Overdrive from (the not so ebook-invested) Rakuten might be good.

My reading of ZodWallop's post is exactly your first sentence, which renders the "only" in your second sentence false.